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JAZZ

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November 05, 2010 – Comments (0)

Guided much higher for full year $1.50 EPS realtime stock price $14.47, pretty cheap for a stock that just guided for $1.50 eps even with today's $2+ gains.

Jazz said its sales improved after it raised the price of its narcolepsy drug Xyrem, which is expected to boost its sales for the rest of the year. Its shares advanced to their highest prices since early 2001.

The Palo Alto, Calif., company reported a profit of $13.2 million, or 32 cents per share, in the third quarter. A year ago the company lost $1.7 million, or 5 cents per share, during the same period. Excluding one-time costs Jazz said its profit totaled 41 cents per share. Revenue rose 45 percent, to $44.8 million from $30.8 million.

Analysts expected a profit of 34 cents per share and revenue of $42.6 million on average, according to Thomson Reuters. Analyst estimates usually leave out one-time items. Shares of Jazz rose $1.75, or 14.1 percent, to $14.15 in afternoon trading.

Jazz markets Xyrem for daytime sleepiness in patients who have narcolepsy, and also for cataplexy, a condition associated with narcolepsy that causes sudden and brief losses of muscle control. Its other approved drug, Luvox CR, is a treatment for obsessive compulsive disorder and social anxiety disorder. The company said Xyrem revenue grew 49 percent to $37.2 million, mostly because of the increased price. Luvox sales rose to $6.6 million from $5 million. Jazz also reported $915,000 in revenue from royalties and contracts.

The company raised its profit and revenue forecasts because it expects more revenue from Xyrem, along with slightly lower research and development costs. Jazz is now forecasting a profit of $1.45 to $1.50 per share excluding one-time costs, up from $1.05 to $1.15 per share. It now expects sales of $164 million to $168 million in sales this year, compared with an earlier estimate of $156 million to $162 million.

Analysts were expecting a profit of $1.15 per share and $161.7 million in revenue.

Jazz is now projecting $140 million to $142 million from Xyrem rather than $132 million to $136 million. It still expects $24 million to $26 million in Luvox revenue.

Shares of Jazz Pharmaceuticals slumped in August after a Food and Drug Administration panel recommended against granting a new approval to Xyrem. Jazz wants to market the drug as a treatment for fibromyalgia, but the panel -- and later, the FDA itself -- said the drug's abuse risks were too great. The stock fell 22 percent the day after the panel made its recommendation.

Over the last four days, however, Jazz shares are up 16.7 percent. On Friday the stock set a high of $14.28.

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